KUALA LUMPUR: The planned audit on some 2,000 government-linked companies (GLCs) is timely to identify those that are dormant and can be closed down or sold, an economist said.
Dr Geoffrey Williams said the money generated from disposing those companies can be channelled for better purposes.
He said GLCs have thousands of subsidiaries which are underperforming and could be sold through a process of responsible privatisation. In other words, they could be sold to employees, community groups or others with a clear social agenda.
"In addition, these subsidiaries are often preferred in tenders for GLC contractors meaning private companies and SMEs are crowded out. Auditing them will help create an agenda to cut crowding out," he told Business Times.
He added GLCs are often underperforming or dormant but still have board positions and senior managers appointed through patronage.
Audits on the GLCs cuts these patronage cascades and reduces corruption.
"The change in criteria for GLC appointments is also important because it opens up opportunities for senior managers especially in underrepresented groups such as women or young executives and makes appointments available on merit.
"This should help to improve the quality, credibility, accountability and transparency of GLC management and governance," added Williams.
The government fully backs the National Audit Department's (NAD) audit of 2,000 GLCs starting next year.
Prime Minister Datuk Seri Anwar Ibrahim said the department's involvement would enhance lower-level oversight and help resolve the frequent confusion among agencies.
In September, the NAD announced that it would be auditing 2,000 GLCs beginning next year to create a new era of enhanced governance in Malaysia.
Auditor-General Datuk Wan Suraya Wan Mohd Radzi said the initiative followed the recent approval of the Audit Act 1957 amendment bill in July 2024, which significantly strengthened the Auditor-General's powers, thus enabling a more comprehensive oversight of public spending in Malaysia.